Energy efficiency IS sexy

Let’s paint a picture here. South Dakota. The Saudi Arabia of wind energy. It’s rural country, beautiful in its own right, but distant, remote. A few wind turbines stand alone on top of a mountain. The power grid is a distant dream, a lack of interconnection and transmission infrastructure making it difficult to bring their power to the country.

Flash to Manhattan– an urban jungle, and given its density of older buildings, arguably the Saudi Arabia of energy efficiency in the United States. A proverbial gold mine waiting to be tapped, the fifth fuel, lying unused as yet, but ready to help reduce power requirements for the future.

Advocates of energy efficiency often seem to caveat their views with the statement that “Energy efficiency is not sexy.” It’s a strange industry where the most ardent supporters seem inclined to footnote their own endorsements.

We could not disagree more strongly with this mindset.

For some reason, renewable energy, when presented as part of a clean tech dichotomy with energy efficiency, is considered much sexier. We’d agree that renewable energy is sexy, but not because of what it is or looks like, but because of what it produces. Energy efficiency is sexy because of what it reduces.

There are few industries with more natural glamour and sex appeal than real estate. When Donald Trump consistently has models on his arm, you know there is some underlying appeal to the asset class. 85% of millionaires are alleged to have made their money in real estate. Energy efficiency is a subset of real estate. It is simply another category of infrastructure investing within the context of the built environment.

Although the main goal of this blog is to investigate the barriers and solutions to successfully scaling financing options for building energy efficiency, we want to kick things off right and tell the world that energy efficiency IS sexy.

Yes – much of the work of energy efficiency retrofits will take place in the back rooms and unseen spaces of buildings, where the boilers and chillers reside. Yes – lobbies rent buildings, and tenants currently care more about marble entrances and fast elevators than low utility bills. That will change. Structured properly, we believe that energy efficiency can save money and create cashflows for all involved.

The next generation of building operators won’t be mechanics – they will be artists, surgeons, able to tune a building to perform beyond the furthest limits of its creators’ expectations. The first breed of these pioneers is upon us – just look at the emerging expertise and nuance of current entrepreneurs such as Brenden Millstein and Raphael Rosen of the firm Carbon Lighthouse – the spiritual heirs of Dick Stein (author of an influential book called Architecture and Energy).

McKinsey’s study of energy efficiency in the US estimates that $520 billion of investment by 2020 could yield over $1.2 TRILLION of savings. To paraphrase the memorable quote from the Social Network, a billion dollars isn’t cool. Do you know what’s cool? A trillion dollars.

We at Financing Efficiency feel strongly that it would be quite a bit of fun to help unlock a trillion dollars of value for the world, and we’re devoted to moving the dialogue forward on how best to make it happen. It’s time to get started.